Washington, D.C. Newsroom, Jul 10, 2020 / 04:00 pm (CNA).- The Holy See is facing a perfect storm of a massive income shortfall, months of financial scandal, and a looming international banking inspection. As it prepares to weather the second half of 2020, a range of measures have been taken to shore up its finances and reputation. But will they be enough, or could they end up making matters even more complicated?
According to an apparently leaked internal memo published on Monday, all curial departments of the Vatican have been asked to move all their cash deposits to the Holy See’s central bank. The move signals the depths of the current liquidity crisis facing the Vatican, and raises a number of questions about its ability to mitigate it.
On July 7, Vatican journalist Marco Tosatti published the text of a letter supposedly sent to the heads of all curial dicasteries on May 8. Fr. Juan A. Guerrero, S.J., prefect of the Secretariat for the Economy, said in the letter that the decision was taken after a May 4 meeting, led by Pope Francis, to respond to “this particularly negative economic juncture.”
According to the text of the letter, every Vatican department has been asked to move all their external cash deposits to APSA, which functions as the Holy See treasury, sovereign wealth manager, and administers payroll and operating expenses for Vatican City.
CNA asked the Holy See to confirm or comment on the leaked letter but received no response.
The instruction to move all curial funds to APSA is a dramatic step, exceeding previous attempts at financial centralization under Guerrero’s predecessor, Cardinal George Pell. It points to an acute cash crunch for the Holy See, and raises the possibility that it may already be struggling to meet daily operating expenses, including payroll.
In May, Guerrero said that in the wake of the coronavirus pandemic, the Vatican is forecasting a reduction in income between 30%-80% for the next fiscal year. While dismissing suggestions that this could lead to a default by the Holy See, Guerrero did say “that doesn’t mean that we are not naming the crisis for what it is. We’re certainly facing difficult years.”
Despite the loss of income, some Vatican departments maintain large investment and asset portfolios, most notably the Secretariat of State and the Congregation for the Evangelization of Peoples (Propaganda Fide).
But while moving all cash reserves and deposits held at external banks to APSA could provide a short-term liquidity bridge for the Holy See, it could also create fresh regulatory headaches for the Vatican, and will likely be difficult to achieve.
As CNA has previously reported, the Secretariat of State has maintained large cash balances with several external banks, including in Switzerland. However, transferring the balance of those funds could prove a far from straightforward process.
As reported previously, secretariat funds on deposit were used as security against a $200 million line of credit extended by two banks, Credit Suisse and BSI. The loaned funds were used, in part, to fund the secretariat’s controversial investment in a London building at 60 Sloane Avenue, which has led to the suspension of several curia officials and the arrest of Italian businessman Gianluigi Torzi.
In recent months, Swiss financial authorities have confirmed that several bank accounts, with balances totalling tens of millions of euros, have been frozen as part of an ongoing investigation into the London deal, led by Vatican prosecutors, making them likely hard to transfer.
It is also not clear if the arrangement of using cash deposits as collateral to secure loans to fund investments remains an ongoing practice for the secretariat with other banks. If it does, transferring those deposits to APSA could trigger the banks to call in their loans, adding a credit crunch to a cash shortage for the Vatican.
The text of the leaked letter from Guerrero appears to acknowledge some potential difficulties for different curial departments in complying with his “request,” noting that “where it is necessary to maintain a deposit with IOR or other banks for operational needs, I am kindly asking you to communicate this to this Secretariat [for the Economy] as soon as possible.”
Even if the Secretariat for the Economy is able to have all curial cash moved to APSA without serious financial penalties or complications, and even if this is sufficient to provide for the Holy See’s short-term liquidity needs, the move could still create other unexpected difficulties for the Vatican.
In September, Moneyval, the Council of Europe’s anti-money laundering watchdog, is set to conduct a two-week onsite inspection of the Holy See and Vatican City – the first since 2012.
The president of the Vatican’s Financial Information Authority, Carmelo Barbagallo has described the inspection as “especially important.” “Its outcome may determine how the jurisdiction [of the Vatican] is perceived by the financial community,” he said on July 3.
Moneyval is expected to arrive with its own list of concerns and questions following months of reporting on Vatican financial scandals. A key item on its agenda is likely to be the role of APSA.
Following the last onsite inspection in 2012, APSA agreed to stop providing services to individuals or taking part in commercial transactions, with these functions being transferred to the Institute for Religious Works (IOR), often referred to as the Vatican Bank, which maintains accounts for Vatican employees, individuals and religious groups. APSA was to be limited to administering the sovereign assets of the Holy See, meeting payroll and operational costs, and functioning as the national reserve bank of the Vatican.
In exchange for agreeing to step back from commercial activity, APSA was exempted from annual inspections by the Vatican’s Financial Intelligence Authority (AIF), whose efforts are in turn assessed by Moneyval.
In 2014, Pope Francis issued new norms, transferring oversight and control of APSA’s remaining investment functions to the Prefecture for the Economy, then headed by Cardinal George Pell.
The AIF’s 2015 annual report concluded that since it is no longer an “entity that carries out financial activities on a professional basis,” “APSA stopped being a part of AIF’s jurisdiction at the end of 2015.”
The 2015 AIF report which exempted APSA from further scrutiny said that “If APSA were to carry out financial activities on a professional basis, it would fall again under the jurisdiction of AIF which… must publish and update the list of subjects who must comply with the requirements set forth in [relevant law].”
But last year, Bishop Nunzio Galantino, head of APSA, acknowledged that it had loaned 50 million euros to finance the purchase of an Italian hospital, the Istituto Dermopatico dell’Immacolata (IDI), in 2015, even though APSA is prohibited from making loans that finance commercial transactions.
APSA was forced to write off 30 million of the 50 million euro loan, wiping out APSA’s profits for the 2018 financial year.
The acknowledgement by Galantino that APSA was in 2015 engaged in prohibited lending activity will likely have attracted the attention of European financial watchdogs, who will want to discuss it in September.
In 2016, Pope Francis partially reversed some of the 2014 reforms, returning control of its investment activity to APSA from the Prefecture for the Economy.
That APSA is engaged in financial activity that requires oversight was underlined when, in June this year, Pope Francis moved the office of the Vatican’s financial records database from APSA back under the management of the Secretariat for the Economy — a move explicitly made to emphasise the need for external oversight.
When Moneyval arrive in September, they are likely to push for a renewed look at the role of APSA and its exemption from AIF and Moneyval’s vigilance – all the more so if it becomes the home for all curial assets.
Some Vatican departments, most notably the Secretariat of State, remain engaged in commercial investments as part of their ongoing financial activities. If, as Guerrero’s May 8 letter indicates, all, or even most, liquid curial assets are now being banked with APSA, it will raise serious questions about how those commercial ventures are being maintained, and if APSA can still credibly claim to play no part in commercial activity.
2020 has become an incredibly high-stakes year for the Vatican, on the line is its ability to continue daily operations and remain a respectable member of the financial community.
Returning to financial health and international credibility are, in many ways, tied together for the Vatican. But after years of regulatory chaos and dubious financial conduct, it remains to be seen if 2020 is a crisis year that makes those efforts come good at last – or finally breaks the bank.
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Pope Francis says “homosexuality is a sin” but is pushing its legalization?
Pope Francis keeps allowing one James Martin to seduce him into these ideas?
Pope Francis and James Martin have a merit to hide who else is involved?
Pope Francis equates buggery with “sexual intercourse outside marriage”?
Pope Francis wants to make this into a “Magisterium” and into acts of piety?
The “conversational tone” of an interview makes up for what really should be taught but isn’t?
Pope Francis says if you do not join in you are Pelagian and/or Jansenist?
Pope Francis calls this clarification? …. when …. James Martin asked for it?
James Martin merits this welcome and specific clarification, but not the four cardinals who authored the dubia?
I think there’s an abiding ambiguity in the Pope’s thinking on the relationship between sin and culpability. According to the Church, my lack of full knowledge or deliberate consent may mitigate or nullify my culpability for an objectively disordered act, but this does not mean that the act is permissible for me even in a qualified or provisional sense, even for the sake of avoiding a greater evil.
Pope Francis suggests just the opposite in his response to the Argentine Bishops’ Letter, which argues I could discern that it is not presently possible for me to avoid sex outside marriage if to do so would lead to a greater sin, though it may become possible in the future with the help of grace. The issue here is not really a lack of full knowledge or deliberate consent. On the contrary, I have deliberated on my options, and have decided that it is necessary for me to consent to sex outside marriage in order to avoid some consequence that I judge to be a greater evil (e.g., subjecting my children to divorce, etc).
This is not the Church’s teaching. It is consequentialism with a smiling face. No matter how difficult my present circumstances may be, I can keep God’s law with the help of His grace. To say otherwise is not Christian mercy, but moral determinism. It is to strip us of agency and dignity, to deny the share Christ gives us in the victory of the Cross.
All this, of course, is old news, but it makes it difficult for me to take the Pope’s much-welcome correction of James Martin at face value. Francis tends to stretch the Church’s teaching on mitigated culpability from something like a distinction between degrees of murder to a distinction between murder and self-defense. If it is sometimes impossible for divorced and remarried couples to avoid sex outside marriage, and if we must treat all sexual sins alike, could it sometimes be impossible for gay couples too? If so, what is the point of re-affirming that homosexual acts are always sins?
“…of course, one must also consider the circumstances, which may decrease or eliminate fault.”
Yes, in individual cases, but from this will James Martin now manufacture the endorsement he needs to proclaim that LGBTQ as a category (!) is exempt from the natural law, the dubia and the Magisterium’s Veritatis Splendor?
What would such an endorsement mean when, instead, the homosexual tendency is triggered or locked in by early sexual abuse, by random sexual experimentation, by the trauma of absentee or abusive fathers, by cultural victimization? Ought the Church to truly affirm the victim persons and call for confronting and healing the entire package of such background abuses–at, say, the “aggregated, compiled and synthesized” Synod on Synodality? Fat chance. But perhaps James Martin will supply Cardinals Hollerich and Radcliffe with the needed wording!
But then there’s also the science–a literature review, plus the lab finding of a few genome “markers” of little explanatory value, and no gay gene:
One recent STUDY in the mix is a review of two hundred peer-reviewed studies on sexual orientation and gender identity. The conclusion: gender identity is not an innate, fixed property of human beings independent of biological sex (Mayer/McHugh, The New Atlantis: A Journal of Technology and Society, Ethics and Public Policy Center, No. 50, Fall 2016).
Other GENOME RESEARCH points to some genetic markers—it does not find a gay gene— and concludes that these markers do not account for same-sex behavior. https://news.yahoo.com/no-gay-gene-study-finds-180220669.html
Well to have clarified his remarks, although Pope Francis apparently doesn’t distinguish between sexual sins in the natural order, and those moral injustices that are a form of hostility to the natural order. Such are homosexual sins. Why the difference?
God ordained human sexual behavior exclusive to a man and woman. The sin then offends God as a sin outside marriage, and a sin against natural law. Also, the common opinion of late is that the predilection toward same sex is not sinful described as such ‘attraction’. The error in this while it’s apparently true that some have a deep seated same sex attraction that of itself may not be sinful -similarly, the historical evidence shows homosexuality behavior can be an acquired sexual dysfunction.
Francis clouds this distinction. That leads many to assume a form of liceity in that sodomy is no less grievous than natural sexual activity between a man and woman, adding to the willingness to engage in unnatural sex. As well as the Pontiff’s frequent admonition, this is how God made you, he loves you as you are. Hearing this from a pontiff weakens resistance to homosexuality, often for some encourages it.
Well said! The pope’s comment was rather shocking. As we read in scripture God condemns homosexuality which is an abomination to Him and for the pope to suggest that those who choose to disobey God should be given any consideration is wrong and speaks volume for a person in his position.
I could just imagine all the heads exploding in “America” offices all over the land as they hear Pope Francis saying that homosexuality is a SIN.
“He can’t say that!” they all cried out at once. James Martin swooned and had to be helped to the nearest fainting couch.
“We need to get him to issue a clarification right away” all the world’s Jesuits screamed in unison. “No one can know that homosexuality is sinful in any respect! We must have full papal approval of homosexuality, at least in the public mind!”
And so, Pope Francis did what he was told.
Pope Francis says “of course, one must also consider the circumstances which may decrease or eliminate fault.” The catechism, however, clearly states that homosexual acts “under no circumstances can they be approved.” The catechism makes things clear, the pope’s statement does not. Some could claim that love for a same sex partner eliminates the moral fault of homosexual acts,
Agreed. I posted a rather over-longish comment about this above.
Pax
Rene, this conflated concept of mitigation is the lever used in Amoris Laetitia to neutralize intrinsically evil acts. John Paul II warned not to make mitigation [in Amoris as you correctly note mitigating circumstances] a category, as a classification of moral acts. Grace is what’s absent in Ch 8 Amoris Laetitia, a surreptitious omission. When the Apostle Paul complained of Satan’s thorn in his side [Aquinas considered Paul’s affliction a moral temptation] Our Lord answered him, ‘My grace is sufficient. My power is perfected in weakness’.
Dear, dear Francis,
I stopped listening to anything you say or write a long, long time ago. Issue an encyclical or make pronouncements ex cathedra on a matter of faith and moral and then I’ll listen and obey. But your day to day remarks are not only confusing but you’re forever contradicting yourself.
Absolutely! Thank God that Francis hasn’t made any doctrinal ex cathedra edicts and pray that he doesn’t.
Up against the abyss, Pope Francis?
The Holy Spirit protects the Deposit of Faith.
I am deeply concerned over this pontiff and his comments.
I wish there was a way, outside of prayer, that we can address our concerns in a spirit of filial love and correction to this Holy Father, similar to St Paul’s rebuke of St Peter, or that of an adult son to his elderly father.
An interesting, albeit sad,turn of events. James Martin left his two audiences with Francis feeling encouraged and supported, probably due to his sense that the pontiff was on his side. But this is just another example of Francis doublespeak. Homosexual acts are sin. The church has taught this for centuries. There really is no need for clarification. Martin needs to either repent or be laicized.
I vote for laicization, as repentance seems to be off the table.
Last time I checked (okay, I never did, but still) mixing ammonia and bleach is not a crime, or even a sin as far as I know, but it is still an incredibly stupid thing to do, and carries with it the possibility of very, very scary breathing difficulties, if not death.
.
Maybe sodomy should be looked at that way. Not a crime, but incredibly stupid and harmful on many, many levels. Not something that can ever be approved of and should always and everywhere be discouraged–including in marriage–an institution that is exclusively between and man and woman.
A sound and sensible take on the issue.
These are not equal comparisons as mixing bleach & ammonia are not known from research or millenia of human experience to be a “dysfunctional behavior against Natural Law” – as IS sodomy and all homosexual sexual behaviors. The ramifications of homosexual sexual behaviors are immediately harmful both naturally & eternally to the people involved, and the consequences of harm and destruction from even one encounter can expand like an algae bloom in summer, and from the common on-going behavior (“gay culture”) explode with far-reaching and forever consequences like the radiation from nuclear explosion/melt-down.
A very good analogy there, the mixing of ammonia and bleach. Unfortunately, with sodomy some have apparently to learn the hard way or, worse yet, never do.
As soon as you read “Pope Francis clarifies comments” you know it is safe to stop reading.
You got it!
I get your point and agree in part. However, I’m not sure it’s ever safe. He is rather like the old uncle or grandpa who keeps coming to family reunions and embarrasses (almost) everyone with his inappropriate comments and behavior. It’s egregious stuff, but nobody seems to be able to stop him. So he keeps roiling things up and fouling the air until, finally, he falls asleep in a rocking chair. Then, then we have a moment of peace and sanity.
God said homosexuality is a sin both in the old and new testament LONG before any pope meekly mentioned it. It’s really sad that you all rely on a catechism made up by sinful men that doesn’t correspond exactly to God’s word. The world is watching as the Catholic church crumbles before their very eyes.
The Old and New Testaments were written by sinful men.
Inspired by the Holy Spirit
Still sinful (the men, that is).
Sinful men under the inspiration of the Holy Spirit so God’s word that the Catholic Church took liberty with and altered it to suit their purpose.
The Pope is implying the realities of voluntary and involuntary homosexuality. The former are sinful and the latter possibly not, as especially when in youth under non-cognitive exploration, a person discovers sexual response though no one taught him nor did one learn it from a source (i.e. ‘it just happened’). If one does not know, then culpability is indeed mitigated. But the one who has already gained full knowledge of disorder (has taken the eternal curriculum of heterosexuality and chastity) and acts out still, ‘will be severely beaten’, in consequence.
Dr/Fr Ripperger has covered this area called ‘involuntary vice’. But someone should write an entire book on this topic, because the tendency of the creature who has already voluntarily or involuntarily wired or configured his body to same-sex attraction (or any other disordered intoxication) preference, searches for every cognitive instance that will legitimize his configuration, to make licit the acting out in the preference. Addicts and compulsives do the same gymnastic of malaprop ‘understanding’ of commentary.
The pope is plying mercy to these vast grey areas, but unawake sinners/the misconfigured accept only what conforms to intoxication preference. Scripture often gets misinterpreted in the same way, in a twilight before facing the fact of disorder.
It is a very complicated area, arriving at actual moral culpability, because inner physical/psychological adolescent maturation often lacks guidance and occurs in total secrecy, and gets ‘locked’ into disordered patterns before cognition, reason or knowledge can undo them.
Conversion is a slow awakening to what got misconfigured, how it should have been configured, and where to get the desire to desist the old and find a home in the new: to change, to be reconfigured: redemption. For many it will take a lifetime of struggle to overcome the Beast who wants to gain the interior permanent upper hand. Which many do not want to make since the misconfiguration is not their fault and because there is deep unfortunate attachment to the intoxication preference.
These are some things the Pope could share with the press, which would have the impossible(!) effect of awakening, remorse, shock, release, amazement, understanding. That’s my prayer. Speak actual truth from the inner world of the sufferer, so he can come to freedom.
Very sad and disappointing that the Holy Father was so quick to clarify his comments in response to the inquiry of Fr. Martin; yet… 4 Cardinals of the Church asked for clarification of the Holy Fathers writings over 6 years ago (the dubia) and these have still not been addressed.
The lackadaisical “clarification” only compounded confusion about what constitutes a sin by persons experiencing same sex attraction. Sexual misbehavior is often a mortal sin, particularly such acts between persons of the same sex. While there are always mitigating circumstances, and only God can judge any particular soul, the Church should always strive to emphasize the “narrow gate” and that obstinate ignorance is not an excuse. Moreover, this would have been a most opportune occasion to strengthen the understanding of what is a God recognized marriage and Holy Matrimony. Instead we received a nuanced response from the Pope that “sex outside marriage” is a sin without soul saving instruction on either. Is there any wonder that Biden and Co Catholics may really believe that same sex “marriage” and funded abortion is supported by the Church?
Pope Francis said the homosexual act is not a crime. Well in some Muslim countries it is a crime.